Ning XI v. Institute of Electrical and Electronics Engineers, Inc.

NING XI, an individual, Plaintiff,v.INSTITUTE OF ELECTRICAL AND ELECTRONICS ENGINEERS, INC., a New York Non-Profit Corporation, and KAREN P. BARTLESON, an individual, Defendants.

MEMORANDUM

Esther
Salas, U.S.D.J.

The
Court writes primarily for the parties. As they are aware, on
September 26, 2017, this Court entered a temporary
restraining order. (D.E. No. 18). Thereafter, the issue of
whether to post a bond pursuant to Federal Rule of Civil
Procedure 65(c) in this matter (and, if so, how much) has
been hotly contested. (See, e.g., D.E. No. 19 at 2,
9-10, 14-19; D.E. No. 20 at 1-9, 11; D.E. No. 24 at 1-9; D.E.
No. 25 at 1-9; D.E. No. 34 at 1-4; D.E. No. 36 at 1-8).

Under
Rule 65(c), the “court may issue a preliminary
injunction or a temporary restraining order only if the
movant gives security in an amount that the court considers
proper to pay the costs and damages sustained by any party
found to have been wrongfully enjoined or restrained.”
“Although the amount of the bond is left to the
discretion of the court, the posting requirement is much less
discretionary. While there are exceptions, the instances in
which a bond may not be required are so rare that the
requirement is almost mandatory.” Frank's GMC
Truck Ctr., Inc. v. Gen. Motors Corp., 847 F.2d 100, 103
(3d Cir. 1988). “Such an extremely narrow exception
exists when complying with the preliminary injunction raises
no risk of monetary loss to the defendant.”
Zambelli Fireworks Mfg. Co., Inc. v. Wood, 592 F.3d
412, 426 (3d Cir. 2010) (internal quotation marks and
citations omitted).

In
particular, the Third Circuit explicitly recognized an
exception to the bond requirement in Temple University v.
White, 941 F.2d 201 (3d Cir. 1991). There, the Circuit
stated that, “[f]irst, at least in noncommercial cases,
the court should consider the possible loss to the enjoined
party together with the hardship that a bond requirement
would impose on the applicant.” Id. at 219
(internal quotation marks and citation omitted). Further, the
“district court should consider the impact that a bond
requirement would have on enforcement of [an important
federal right or public interest] in order to prevent undue
restriction [of them].” Id. at 220 (citation
omitted). This “Temple University exception
involves a balance of the equities of the potential hardships
that each party would suffer as a result of a preliminary
injunction. Where the balance of these equities weighs
overwhelmingly in favor of the party seeking the injunction,
a district court has the discretion to waive the Rule 65(c)
bond requirement.” Elliott v. Kiesewetter, 98
F.3d 47, 60 (3d Cir. 1996). To reiterate, however, the Third
Circuit has explicitly held that “a district court
lacks discretion under Rule 65(c) to waive a bond requirement
except in the exceptionally narrow circumstance where the
nature of the action necessarily precludes any monetary harm
to the defendant.” Zambelli, 592 F.3d at 426.

Here,
at the TRO hearing, Defendant sought $1, 000, 000-and
maintains that this amount is “reasonable.”
(See D.E. No. 20 at 8). “[B]ut based on closer
analysis of the specific harm that [Plaintiff] could inflict,
[Defendant] believes that a bond in the amount of $500, 000
would be sufficient.” (Id.). In subsequent
briefing, Defendant again requested “that this Court
set the bond in the amount of $500, 000.” (D.E. No. 25
at 9).

Plaintiff,
however, affirmed the following: “I . . . understand
that [Defendant] has requested a $500, 000 bond. I am a
professor and I detailed my salary in my last affidavit. I
cannot afford such a bond.” (D.E. No. 24-1 ¶ 5).
Indeed, Plaintiff had affirmed earlier in this case that:
“I currently make approximately $200, 000 a year as a
professor at the University of Hong Kong, and I receive an
annual raise of between 3-10%.” (D.E. No. 5-1 ¶
7).

In
response, Defendant argued (among other things) that
“[t]he cost of the bond could be as low as 1-2% of the
face amount of the bond-that is, $5, 000-$10, 000 cost for a
$500, 000 bond, ” and that Plaintiff “offers no
reason to believe that the cost of the bond is out of his
financial reach.” (D.E. No. 34 at 3-4). That was on
October 23, 2017. (See id.). And since then,
Plaintiff has not countered otherwise. Accordingly,
exercising its discretion in setting the amount of a bond,
the Court finds that a bond of $5, 000 is appropriate
here-and declines to find that a waiver is warranted for
primarily the following reasons.

First,
the Court is persuaded by Defendant's contention that
“[a]t most, [Plaintiff] is arguing that the risk may
not be as great as [Defendant] fears, but that does not mean
the risk is zero.” (D.E. No. 25 at 6); see
Zambelli, 592 F.3d at 426 (“[A]n extremely narrow
exception exists when complying with the preliminary
injunction raises no risk of monetary loss to the
defendant.”) (internal quotation marks and citations
omitted); Frank's GMC Truck Ctr., 847 F.2d at
103 (“We have held previously that absent circumstances
where there is no risk of monetary loss to the defendant, the
failure of a district court to require a successful applicant
to post a bond constitutes reversible error.”)
(citation omitted).

Second,
the Temple University exception involved, in part,
“the impact that a bond requirement would have on
enforcement of [an important federal right or public
interest] in order to prevent undue restriction [of
them].” See 941 F.2d at 220 (citation
omitted). Indeed, Defendant raised this point in its October
11, 2017 brief, asserting that Plaintiff's “stated
concerns here (such as loss of income or harm to his career
and reputation) are primarily personal, and they do
not fit within the rare public interest exception recognized
in the Third Circuit.” (D.E. No. 25 at 2 (citing
Temple Univ., 941 F.2d at 219-20) (emphasis in
original)). Plaintiff's subsequent October 23, 2017
brief, however, does not convince the Court how the
Temple University exception is implicated in this
regard. (See generally D.E. No. 36).

Third,
the Third Circuit has set forth the following regarding the
function of a bond (which informs the Court's finding
herein):

The functions of the bond are illustrated in the course of
litigation involving preliminary injunctive relief. When a
court grants an applicant's request for a preliminary
injunction, it will generally condition this grant on the
applicant's posting a bond. The applicant then decides
whether to accept the preliminary relief by posting the bond
or to withdraw its request. The applicant may base its
decision on whether it wants to expose itself to liability up
to the bond amount. If the preliminary injunction takes
effect and it is later determined a party was wrongfully
enjoined, that party may then seek recovery against the
posted bond.

Sprint Commc'ns Co. L.P. v. CAT Commc'ns
Int'l, Inc., 335 F.3d 235, 240 (3d Cir. 2003);
see alsoInstant Air Freight Co. v. C.F. Air
Freight, Inc., 882 F.2d 797, 804 (3d Cir. 1989)
(“It is true that a bond may create a barrier to the
granting of a preliminary injunction. The barrier fulfills
one of the purposes of the bond requirement. . . . The bond
deters rash applications for interlocutory orders; the bond
premium and the chance of liability on it causes plaintiff to
think carefully beforehand.”) (citation omitted);
cf. Frank's GMC Truck Ctr., 847 F.2d at 103
(“[T]he instances in which a bond may not be required
are so rare that the requirement is almost
mandatory.”).

Fourth,
Plaintiff provides no reason for the Court to find that that
a $5, 000 bond amount is out of his financial reach. As
Plaintiff himself states: “there is an exception to the
general rule requiring bonds in ‘noncommercial
cases' like this one, where ‘the court should
consider the possible loss to the enjoined party together
with the hardship that a bond requirement would impose on an
applicant.'” (D.E. No. 36 at 1-2 (quoting
Temple Univ., 941 F.2d at 219)). Unconvinced that a
$5, 000 bond would impose undue hardship upon Plaintiff, the
Court declines to exercise its “discretion to
waive the Rule 65(c) bond requirement.” See
Elliott, 98 F.3d at 60 (emphasis added); see also
Scanvec Amiable Ltd. v. Chang, 80 Fed.Appx. 171, 175 (3d
Cir. 2003) (“In some instances, strict application of
the security requirement may be inappropriate, and at least
in noncommercial cases, the court should consider the
possible loss to the enjoined party together with the
hardship that a bond requirement would impose on the
applicant. This exception, however, remains narrow and
may only be invoked by the District Court upon specific
findings regarding the relative hardships to each
party.”) (internal quotation marks and citations
omitted) (emphasis added).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Finally
(and on a related note), Defendant recently clarified that it
“does not oppose conversion of the temporary
restraining order into a preliminary injunction, except on
the grounds previously argued, which this Court has
rejected”-but it is Defendant's “position
that [P]laintiff . . . is required to post a bond.”
(D.E. No. 34 at 1). Accordingly, the existing TRO ...

Our website includes the first part of the main text of the court's opinion.
To read the entire case, you must purchase the decision for download. With purchase,
you also receive any available docket numbers, case citations or footnotes, dissents
and concurrences that accompany the decision.
Docket numbers and/or citations allow you to research a case further or to use a case in a
legal proceeding. Footnotes (if any) include details of the court's decision. If the document contains a simple affirmation or denial without discussion,
there may not be additional text.

Buy This Entire Record For
$7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.